When Fuel and Politics Mix

Wednesday

Nov 28, 2007 at 5:22 AM

As oil prices flirt with record highs, the Democratic and Republican candidates are offering profoundly different long-term approaches to energy policy.

WASHINGTON, Nov. 27 — As oil prices flirt with record highs, hovering around $95 a barrel on Tuesday, the Democratic and Republican presidential candidates are offering few quick fixes but profoundly different long-term approaches to energy policy.

Over the next decade or two, the differences could have a major effect on billions of dollars in government spending, on the relative prices of gasoline versus renewable fuels and on the efficiency of American cars and trucks.

For Democrats, the goal of energy policy is largely about reducing oil consumption and has become inseparable from the goal of reducing the risk of climate change.

For the Republican candidates, energy policy is primarily about producing more energy at home — more oil and gas drilling on the Outer Continental Shelf and in the Arctic National Wildlife Refuge; more use of American coal to produce liquid fuel; and, as with Democrats, more renewable fuels like ethanol.

By contrast, all of the Democratic candidates would repeal billions of dollars in tax breaks for oil companies, spend billions more each year to develop alternative fuels, and require cars and trucks to be far more fuel-efficient.

Indeed, most of the Democratic rivals are proposing plans that are more aggressive than the bills that Democratic leaders in Congress are hoping to pass before year-end. The disparity raises questions about whether the candidates’ plans are politically realistic. The candidates, however, are quietly acknowledging limits to what they can offer in the way of immediate relief, aside from putting more money into a program that helps low-income people with the cost of heating oil.

“There are no short-term solutions,” said Leo Hindery, the chief economic adviser to John Edwards, the former senator from North Carolina who has positioned himself to the populist left of his principal Democratic rivals.

The Republican contenders, maintaining the traditional conservative approach of relying on market forces, are much more reluctant to impose change through restrictions on oil and coal or mandates for alternative fuels.

“The truth is that the answer to high prices is high prices,” said R. Glenn Hubbard, a top economic adviser to Mitt Romney, the former Republican governor of Massachusetts. “This is one area where the public expects more from politicians than politicians can deliver.”

To be sure, the party contrasts are muddled in some areas.

Among the Democrats, Senator Barack Obama of Illinois supports the development of coal-based “clean” liquid fuels — an idea that grates on many environmentalists who see coal as a major contributor to global warming. Senator Obama also is open to government support for nuclear power while Senator Hillary Rodham Clinton has said she is agnostic on the issue.

Within the G.O.P. group, Senator John McCain of Arizona has broken with the Republican orthodoxy on increasing energy production. Senator McCain repeatedly opposed oil and gas drilling in the Arctic National Wildlife Refuge, a top goal for both President Bush and Republican leaders in Congress.

Likewise, Senator McCain and Mike Huckabee, the former governor of Arkansas, are the only Republican candidates to support mandatory limits on emissions of greenhouse gases. Mr. Huckabee, who has positioned himself as a standard-bearer for social conservatives and Christian evangelicals, recently called action on climate change a “moral issue.”

Manik Roy, a lobbyist for the Pew Center on Global Climate Change, said the Republican candidates may be more divided than they appear about controlling greenhouse emissions.

Mr. Romney, for example, said he opposed government restrictions. As governor of Massachusetts, he stayed out of a regional “cap and trade” plan by Northeastern states to impose ceilings on emissions by electric utilities and let companies trade their emission allowances.

But shortly after he made that decision, his state regulators imposed their own restrictions on such emissions.

For consumers, the precise effects are difficult to predict. Democratic mandates to sharply increase the use of renewable fuels could initially lead to higher prices at the gas pump, much as the mandate to blend ethanol into gasoline contributed to higher prices in 2005.

But over time, a large expansion of biofuels could both reduce their own production costs and put downward pressure on oil prices. Much would depend on how fast new technologies, like ellulosic ethanol, become practical on a large scale.

The Republican proposals to expand domestic oil and gas drilling could damp oil prices, though not for at least five years because of the long lead times to discover and develop new reserves. Likewise, Republican support for coal-based liquid diesel fuel could eventually drive down prices for gasoline. But without expensive and still unperfected technology to capture carbon dioxide, such liquids would increase the production of carbon dioxide, which most scientists say would aggravate global warming.

At the same time, Republican proposals to encourage more oil and gas drilling, and the candidates’ reluctance to require lower greenhouse emissions, could boomerang by prolonging what President Bush has called the nation’s addiction to oil.

Though they differ on the details, the Democrats all closely link the goals of “energy independence” and slowing global warming.

Most of them would create a cap-and-trade program, under which the government would set a ceiling on carbon emissions and require companies that burn fossil fuels to bid for carbon permits through an auction. The ceilings would be steadily lowered over the coming decades, with a goal of reducing carbon emissions as much as 80 percent below current volumes.

But for Republicans, energy policy is quite separate from the issue of climate change — and some of the candidates have been skeptical that global warming needs to be addressed.

The Republican candidates have mostly been silent about repealing tax breaks for oil companies. Though all the candidates support investment in biofuels like ethanol and biodiesel (Iowa, after all, dominates the early primary race in both parties), most of the Republicans oppose mandatory restrictions on carbon dioxide emissions that would effectively penalize the use of oil and coal.

In a written response to questions about his energy positions, Mr. Romney said on Friday that “now is not the right time to raise taxes on our oil companies” and expressed doubt about requirements to reduce carbon dioxide emissions.

“While it is likely that human activity is contributing to climate change, I am not sure how much, or what we can do to significantly reduce or reverse this effect,” Mr. Romney wrote. Any new mandates for renewable fuels should be “a collaborative effort between industry, scientists, and the agriculture and energy communities.”

By contrast, the leading Democratic presidential candidates have jumped ahead of their own colleagues in Congress — possibly too far ahead to be politically realistic.

In Congress, for example, Democratic leaders have coalesced behind a cap-and-trade proposal under which the government would initially give away about half the carbon-emission allotments to the factories and electric utilities that would need them, granting them a large subsidy to help pay for future investments. But most of the Democratic candidates insist that companies should bid for all the allotments in an auction and pay for them, which would raise much more money for the government.

The Democratic candidates are also running ahead of their counterparts in Congress on fuel economy. The Senate recently passed a bill that would increase the average fuel economy of cars and light trucks to 35 miles per gallon by 2017. The current requirement is 27.5 miles per gallon for cars and 21.3 miles per gallon for pickups, sport utility vehicles and minivans.

Most of the Democratic candidates would go much further. Senator Clinton says she would require 40 miles per gallon by 2020 and 55 miles per gallon by 2030. Mr. Edwards favors 40 miles per gallon by 2016, and Gov. Bill Richardson of New Mexico wants to push to achieve 50 miles per gallon by 2020.

But those requirements could be impossible to pass. In the House, Democrats from Michigan and other car-producing states strenuously oppose even the Senate’s comparatively modest plan. After months of stalemate, House and Senate Democrats are close to agreeing on a compromise before Christmas.

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